Advertising has long been a prolific industry, as famously chronicled in the 2000s TV drama Mad Men. But since the rise of digital advertising in the late 1990s, its pervasiveness, power and monetary potential have only expanded.
BCC Research expects the digital advertising space to surpass the trillion-dollar mark by 2027, growing at a CAGR of 14.7% between 2022-2027. Today, we’re diving into the factors driving the continued expansion of the market and exploring how digital advertising retains its fiscal power.
As the world became increasingly digital, the scope for advertising widened. With more than half of the world’s population using the internet from their phones, it’s little surprise digital advertising is witnessing a boom. As 5G networks further take root, the ease and potential for advertisers to target consumers becomes more profound.
Smartphones are helping brands understand consumers’ interests and what stimulates their decision to purchase. These small but mighty devices provide real-time marketing opportunities for advertisers to engage with users. With the world becoming increasingly digital, smart phones and high-speed internet will further nurture the growth of digital advertising.
Location-based marketing allows brands to target customers based solely on their geographic location. This empowers marketing teams to reach customers based on proximity, simplifying the shopper’s journey from discovery to purchase. It uses the mobile device user’s past and current location to display relevant content. The most common are geofencing, geo conquesting, and proximity marketing. Each of these techniques uses different technologies to target users. Among them are GPS, IP address, smart beacons, and more. Location-based marketing helps brands reach specific customer segments with targeted offers, improving customer satisfaction and increasing the value of immediate gratification.
The rising ad spending across the globe is the primary factor supporting the market growth. Brands and businesses are making huge investments in ad and marketing activities to enhance their customer base and brand awareness. For instance, in 2020, Amazon Inc. spent $22 billion in marketing and advertisement activities, increasing around $3 billion from the previous year. The growing ad spending by leading e-commerce companies is boosting market demand.